Revised Post Office Small Saving Interest rates – July to Sep-2018

Yesterday, Ministry of Finance announced revised interest rates for post office small saving schemes applicable for the period July to Sep-2018 (2nd Quarter of FY2018-2019). This time too, there is some relief to investors who are depending on small saving schemes. Ministry of Finance has not changed any interest rates for Small Saving Schemes. Recently, some of the banks have started increasing FD rates. This gives an indication that interest rates may be going up in the future. What is the latest post office small saving scheme rates for July to September 2018? Which is the post office small saving schemes offering highest interest rates compared to bank FD’s or other saving schemes? How is the post office interest rates trend looking in the last 6 quarters?

Latest and Revised Post Office Small Saving Interest rates – July to Sep-2018

There is no change in Interest rates this quarter i.e. July to Sep-2018 compared to the previous quarter. The existing rates and effective yield remain same. This is a big relief to investors who are investing in small saving schemes. SBI has hiked the interest rates twice in the last 3 months and other banks too are following this. This gives an indication that in the future, interest rates could be increased.

Small Saving Schemes can be now purchased through many banks like ICICI Bank, HDFC and Axis Banks.

Revised Post Office Small Saving Interest rates – July to September 2018

Here is the quick snapshot about the latest and revised interest rates, which is applicable from July to September, 2018.

1) Among the post office small saving schemes, highest interest rates are being offered on Sr. Citizens Saving Scheme, which is 8.3%. Earlier even Sukanya Samriddhi Account (SSA) Scheme too used to get higher interest among the small saving schemes. Now SSA offers only 8.1% interest rate for July to September 2018 quarter.

2) With compounding of interest rates by a quarter, time deposits and recurring deposits offer high interest rates per annum.

3) Post office time deposit offers 6.6% to 7.4% per annum from 1 to 5 years tenure. After compounding, the term deposits give a yield of 6.8% to 7.6% per annum. Currently, some banks are offering FD rates, which are between 6% to 7.2% per annum only. Hence Post office Time deposits are best, compared to bank fixed deposit schemes.

4) Investment in Kisan Vikas Patra (KVP) would be doubled after 118 months as per latest interest rates. Till 3 quarters back, the time taken to double your money under KVP was only 115 months. If you want to double your money in banks, you need to deposit for at least over 125 months. KVP is still beneficial compared to bank FD schemes.

5) The Post Office Monthly Income Account (earlier called as MIS) offers 7.3% per annum interest rates, which is payable every month. If you are a retired person, investing in post office monthly income account (earlier called as MIS) is one of the best way to get safe monthly income.

6) If you want to save money for your girl child and get higher returns, you can invest your money in Sukanya Samriddhi Account Scheme which offers 8.1% interest rates. The maturity amount is tax free. This is still a good small saving investment scheme for July to September 2018 quarter.

7) If you want to invest your money for child education or for their marriage, you can consider investing in Public Provident Fund (PPF) which offers 7.6% interest. While the tenure of PPF is for 15 years, it offers safe tax free returns along with tax benefits u/s 80C.

8) If you are planning to save money every month, you can consider post office recurring deposit which offers up to 6.9% annualized yield. You can invest Rs 1,000 per month in a post office RD scheme for 5 years. You can invest a minimum of Rs 10 and in multiples of RS 10 there-off.

9) If you are a low risk taker and planning to invest money to save tax, NSC is one of the best option to invest. Otherwise, you can skip this investment option.

Here are the Revised Post Office Small Saving Interest rates – July to Sep-2018

How is the trend looking for Small Saving Schemes Interest Rates in the last 6 Quarters?

Conclusion: Post Office / Small saving schemes, offer the highest returns compared other saving schemes and bank FD schemes. Some of the popular schemes like PPF and Sukanya Samriddhi Yojana Scheme offers highest interest rates. If you are a low risk taker, consider investing in small saving schemes offered by the post office.

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6 comments

sir,
I am a NRI aged 38 leaving job because of health issue. Have 80 lakhs liquid cash savings. I need to care wife, two kids and two mother. kids at 6 and 4. mothers age 64 and 54. I think, I cant work in India also. already have LIC policy and family health insurance except two mother. can you advise suitable investment for the 80 lakhs for daily life in current status, kids education and marriage. Already have house, car and scooter with out any loan. wife and mother don’t have any income. I didn’t like to take risk in investment. Hoping your great advise ASAP.

Yes. The interest rates are linked to yields of government bonds, and even though yields of government bonds have been increasing in the near past, the government hasn’t passed on the benefit to investors of small savings schemes. But when the yields go down they are quick to slash interest rates…this just goes to show the government’s hypocrisy as they portray themselves concerned about ‘aam aadmi’. In fact that ‘aam aadmi’ is the worst sufferer because of such policies.

Frankly speaking this Govt is very quick to ‘reduce’ the interest rates at every drop of hat by the RBI/market but has not bothered to ‘increase’ it when the RBI increases the Repo Rate. Why there is a double standard. Only to cheat the savings of hapless crores of poor citizens of their rightful interest rate from government administered savings schemes.

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